News

City Council helps pave the way for a new housing development in Athens

By: David Forster
Posted on: Wednesday, August 21, 2024

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ATHENS, Ohio (WOUB) — A plan to build much-needed housing in Athens that was on the verge of collapse last year is now back on track.

The plan is for about 50 townhouses in the University Estates area off of State Route 682 just past the West Union Street intersection.

City leaders have been working to bring this project to life for five years. But last year it seemed all that effort may have been for nothing when the estimate for laying the infrastructure came in three times higher than expected.

The project no longer penciled out for developer Howard and Lawson Ltd at that point, even with a tax incentive the city lined up to help offset the cost.

But rather than let the project die, city leaders decided to have the city pay for the infrastructure instead and claim the tax credit for reimbursement.

All that was needed was for the City Council to approve the funding plan. Last week, that approval seemed uncertain.

Some council members were concerned the developer had committed to a base price for the two-bedroom units but not the three-bedroom units.

“It seems that would give them license to charge whatever they want to,” Council member Solveig Spjeldnes said.

Spjeldnes, who chairs the city’s Affordable Housing Commission, acknowledged the project was never intended to be low-income housing and that the city needs more housing at all price levels.

“We need housing for professors, we need housing for service workers, we need housing for people who come in as executives,” she said.

But at the same time, Spjeldnes said, she didn’t want to leave the price for three-bedroom units open-ended.

“I’m not really asking for a huge commitment to a low price, particularly, but I think it’s fair to put something in there for three-bedroom housing,” she said.

The developer agreed to a price, and at Monday’s meeting the City Council approved the plan for funding the infrastructure.

The base prices for the planned townhomes will be $267,800 for a two-bedroom unit and $295,000 for a three-bedroom unit in 2025, with a 3 percent allowable escalation each year.

This puts the two-bedroom units within reach of those with an annual household income of at least $81,000 with a down payment of 20 percent and at the current average interest rate of 6.5 percent. About $89,000 in annual income would be needed for the three-bedroom units.

These income figures assume that no more than 28 percent of monthly income will be spent on the mortgage plus property taxes and insurance. This is the standard for what is considered financially prudent and lenders will be looking at this when deciding whether to approve a home loan.

Before the vote, Kenneth Oehlers, executive director of Habitat for Humanity of Southeast Ohio, encouraged council members to support the plan.

Oehlers said he served as president of the local chamber of commerce for two years and sat on the board for eight.

“Every single meeting that we had there was a discussion about how employers were lacking housing options for their employees and it was difficult to find good employees because of housing issues,” he said. “So any kind of housing we can create in the community right now is beneficial.”

The incomes required to buy the planned townhouses are well above the median household income for Athens County, which according to the latest estimates from the U.S. Census Bureau is around $50,000.

Oehlers alluded to this by adding “this is not the only type of housing we need to build. I look forward to working toward creating some lower-cost housing in the community so that everybody can become a homeowner and build equity.”

After the vote, Mayor Steve Patterson noted that the council’s decision sends the right message.

“We often hear how ‘business unfriendly’ Athens has been,” he said. “And I think this is a positive signal to developers that Athens is looking to have development for housing stock here in the city of Athens in order for us to grow.”